5th Jun 2023

Juncker slams Greek euro-exit 'propaganda'

Eurogroup chief Jean-Claude Juncker on Monday (14 May) lashed out at EU politicians talking "nonsense" about a Greek euro exit, and hinted at possible adjustments in the austerity programme if Greece forms a government.

"I don't envisage even for one second Greece leaving the euro-area. This is nonsense, this is propaganda," Juncker said during a press conference after a meeting of eurozone finance ministers.

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"We have to respect the Greek democracy. I am against this way of dealing with Greece, provoking the Greek public opinion and giving advice and indications to the Greek sovereign (state).

"We don't have to lecture Greece, but the Greek public has to know we have agreed on a programme and this programme has to be implemented," Juncker said.

In the past few days, a series of EU politicians, bankers and officials have openly floated the possibility of Greece quitting the eurozone if it does not comply with the austerity programme linked to the €130 billion bail-out agreed in March.

A majority of parties that won the 6 May elections reject the terms of the bail-out and want it re-negotiated or scrapped altogether.

Juncker hinted that Greece may be given more time to meet its deficit targets once a government is in place.

"If there were exceptional circumstances, we wouldn't preclude a debate about an extension of the period. But the proper order is needed - first to have a government, then exceptional circumstances. There was neither the case today, so there was no discussion about it."

For his part, EU economics commissioner Olli Rehn said that "the understatement of the evening" would be to say that Greece has "problems" in implementing the programme, compared to other bailed-out countries such as Ireland or Portugal.

"Greece needs a stronger political consensus... it also has a lack of administrative capacity, but we are helping Greece in reinforcing that," he said.

The Greek president on Tuesday (15 May) is set to hold a last round of talks to try to get support for a technocratic government. He appointed technocrat Prime Minister Lucas Papademos six months ago to head a government supported by the country's then two biggest parties.

But voters punished these parties in the 6 May elections, and a majority of parties is now against the bail-out. If no cabinet is formed by Thursday, the president has to call for new elections. Polls indicate that the anti-bail-out left-wing Syriza party would come in first if new elections were to be held.

Brinkmanship rhetoric hides cost of Greek euro exit

Within the space of one week, EU politicians have begun talking in a matter-of-fact way about Greece's exit from the eurozone, but analysts say this would involve upheaval far beyond what the casual statements imply.

Merkel and Hollande want Greece to stay in euro

France's newly elected president and the German Chancellor have said they want Greece to remain in the eurozone. But the IMF says an "orderly exit" is a real option.

ECB: eurozone home prices could see 'disorderly' fall

The European Central Bank in its Financial Stability Review warned EU home prices could see a 'disorderly' fall as high mortgage rates are making houses unaffordable for households and unattractive for investors.


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